It’s not the way you do a deal today — a mutual agreement made in three days, a handshake, divine intervention. This is not the business book way of merging two PCT Top 100 companies.
But that’s how Minneapolis, Minn.-based Plunkett’s Pest Control (#20) and Varment Guard (#74) headquartered in Columbus, Ohio, became one in February 2018. “As two companies that are very much independent and share a common vision naturally and easily, that gave us the confidence to do what was right for us,” says Stacy O’Reilly, president of Plunkett’s.The merger grows Plunkett’s service area from 11 to 17 states and boosts revenues to $55 million. It’s the largest deal Plunkett’s has ever done — by a multiple of 10, O’Reilly points out. And for Plunkett’s, the acquisition opens the door to a fast-growing wildlife control business — a specialty Varment Guard has excelled at, attracting important accounts like airports. “We’ve flirted with those services, but now we’re equipped to get serious,” O’Reilly says.
Scott Steckel, Varment Guard co-owner, says, “We were a specialist model, Plunkett’s is a generalist.”
Each brought assets to the table that the owners agreed would make a combined firm stronger. “We made a pact to say we will look at each other’s business practice—and no ownership pride — we said we need to objectively look and take the best of both companies and go in that direction,” O’Reilly says.
There would be no force-feeding of systems or “surprises” with integrating the organizations. (Again, not the way most deals play out.) From the first conversations, there was a cooperation that set the tone for a collaboration vs. a takeover. Steckel says, “This is the part where we put the business book away. We said, ‘How do we get our companies together? We’re pretty close but we’re not perfectly aligned.’”
They set a target date — February 2018 — “and we said, ‘Let’s both drive our companies toward that,’” Steckel says.
COMING TOGETHER. The way Varment Guard pays technicians seemed to work better than Plunkett’s way. And, Plunkett’s software was stronger, so Varment Guard adopted it. “They could look at their own employees in the eye and say, ‘We are doing this because it is the right thing to do for our business and we are making this change,’” O’Reilly says. “Plunkett’s had no control over [the change]. We said, ‘You guys do it how it’s best for you,’ and they did. And, Plunkett’s did the same thing.”
Jim Vaive, a Varment Guard owner, was the “culture guru,” O’Reilly says. His influence on the team was palpable. “I never met a group of employees more open and receptive to the idea of change and not being afraid of it — they’re just a very open group of people,” O’Reilly says.
Of course, it wasn’t all easy. For example, Varment Guard changed the way its workday was structured and essentially, technicians learned to do more — residential, commercial, sales — rather than blocking their schedule with just residential visits, for example. With the old structure, on a bad “weather day,” they realized no production. The new way provides a more stable schedule and the variety is great for technicians, too, Steckel points out.
This tactic came from O’Reilly’s father, John O’Reilly. Stacy says he encouraged giving “people geographies that they could own like a business. It requires more training, more responsibility — we’re always trying to make a better experience.”
As for technology, Varment Guard’s VoiceOver IP phone system bounced calls around. “With Stacy’s team, everybody answers and everybody answers for everything,” Steckel relates. “We went from a 2-minute wait time to under a 5-second wait time. And I’m getting feedback from customers, ‘I like a person. This is awesome. I didn’t wait.’”
And, Plunkett’s software was integrated into Varment Guard. O’Reilly says her company reached a size, in 2016, where it could customize software for technicians and customers. By adopting this, Varment Guard and Plunkett’s integrated their systems.
Now with Varment Guard’s robust wildlife control division, Plunkett’s can do more for customers in all its territories by delivering this expertise. “They have the expertise and resources and knowledge and experience to design, propose, sell and run these extremely large and complicated bird projects that no one in my company has the ability to do,” O’Reilly says.
THE RIGHT KIND OF CHANGE. People have always been the most important factor for both organizations. And, ultimately, preserving the culture is why Varment Guard was turned off by other suitors. The four owners recognized that there were no heirs to succeed them, so they began to entertain buyers — about 20 of them, says Jim Vaive, who along with Sandy Vaive, John Livingston and Scott Steckel, made up the team that has run the business since 1983.
“We wanted a buyer who would keep the essence of our company intact and treat our customers and employees well,” Vaive says.
O’Reilly had never done a deal this large. She says, “[Varment Guard] is a pretty big company and it never would have dawned on me that the owners would be willing to structure the deal in a way that I could afford it.”
John Livingston adds that Plunkett’s coming to the table was “divine intervention.” The four Varment Guard owners “had separate personal lives, different goals about when we were going to get out, and we could not come to a cohesive agreement on how we were going to do that,” he says. But, the relationship with O’Reilly and a mutual realization that they “operate a lot like us” triggered interest from all sides.
Livingston says the deal “relieves a whole lot of stress” and allows the owners to work in the Plunkett’s business.
Other opportunities, Livingston says, felt “toxic” for the culture. But the Plunkett’s deal “fit together seamlessly, easily and comfortably.”
Both companies are part of the Copesan network with similar philosophies, Midwestern roots and a spirit of treating people right. “The deal doesn’t affect anything with Copesan,” O’Reilly says, adding that the two companies were adamant about making this announcement themselves.
The deal came at an ideal time for both companies. Livingston says, “Our employees are family.” To which O’Reilly immediately said to Livingston, “I really care about your employees.” That’s an intangible that couldn’t be written into a contract, no matter how by-the-book a deal was done.
“We all have seasons, seasons change and we have to be willing to change,” Livingston says of the next chapter for the business. “Plunkett’s was the right company to change with.” — Jodi Dorsch and Kristen Hampshire